01 May 2016

The Huntly power station decision - projected energy emission reductions to 2020 up in coal smoke

The decision to keep the Huntly coal thermal power station open for another four years is not only contrary to all New Zealand's commitments and climate targets, it also sends the Ministry for the Environment's projections of stabilising energy emissions to 2020 up in a cloud of coal smoke. NB this post is also features on Hot Topic.

We seem to have had an extra dose of announcements and activities about climate change in an action-packed month of April.

Patrick Smellie notes two interesting details of the story. First, the irony that the "100% renewable" generator Meridian Energy has led the process of negotiating with Genesis. And second, that the public announcement of the shut-down by Genesis was just 'code' for negotiating a higher price from other generators.

The Green Party's Gareth Hughes points out that on the basis of Huntly's generation of 1,277 GWh of energy in 2015, the closing of Huntly would have lifted New Zealand's proportion of renewable electricity generation from 79.9 percent to 84.5 percent. So unsurprisingly the Meridian-Genesis deal is just 180 degrees in the wrong direction in terms of the 90 percent renewable target and the need to reduce greenhouse gas emissions.

But what effect will this have on the Ministry for the Environment's projections of energy emissions out to 2030? These are part of the December 2015 report "NZ’s Second Biennial Report under the UNFCCC". This chart shows projected "with measures" emissions and "without measures" (i.e. business as usual).

In the chart, the projected "with measure" emissions for each sector are the circles and lines. The projected 'business as usual'/'without measures' emissions are the lines between the data points marked by triangles on 2020 and 2030. That's because the without measures projections are for only two years! It is almost as if they are an after-thought.

The other thing to note is that for agriculture, transport and industry, there is no difference between "with measures" and "without" projections. This is of course because the Ministry is reflecting the Government's intention to exempt those three sectors of the economy from any climate change policy.

However, have a close look at the energy sector projections. There is some 'daylight' visible between the 'with' and 'without' projections. The "without" trends ever so slightly upward and the "with" trend is a plateauing. So something is expected to change the slight upward emissions trend to a plateau. The Biennial Report states on page 39;

"Energy emissions are expected to increase between 2013 and 2015, but then fall between 2015 and 2020. The remaining coal-fired power plant in New Zealand is expected to be decommissioned by 2018, reducing emissions from coal. Coal-fired electricity generation is expected to be replaced mainly by a combination of hydroelectricity, geothermal, wind, and gas-fired peaking plants in the modelled scenario".

In other words, the 'something' was the closing of Huntly. The Ministry for the Environment was relying on Genesis Energy to honour its public statement that it was closing Huntly. Which of course would then be attributed to the New Zealand emissions trading scheme. However it looks like the projections are now out-dated.

Conclusion

The 2030 emissions projections show that New Zealand's climate change policies are intentionally not affecting three out of five sectors of the economy. Now with two power generators reaching a private agreement to keep an non competitive asset, Huntly thermal power station, emitting for four extra years, the projected savings in energy emissions out to 2030 have gone up in a puff of coal smoke.